Credit Cards: To Close Or Not To Close | Our Finance
"Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy." - Groucho Marx (1890 - 1977)
I have an old credit card account where my charging privileges were revoked because I was having trouble making my payments. I have since then paid off the card and it is at a zero balance. Do I now close the account? Would it help my credit more if I left it open? I am trying to rebuild after years of bad credit decisions.
Deciding to close ...
a credit card or leave it open is a tough decision. Unfortunately, it sounds like the credit card issuer beat you to the punch. Chances are they closed your account due to past due activity, which is a major blow to your credit score because it reflects that the account was closed by the issuer, rather than by you, voluntarily.
Now that the card is paid off, you might try contacting the issuer to ask if they can update the account to reflect it was closed voluntarily. They probably wont change the accounts status, but its worth asking. The very fact you paid it off will help heal your credit score, as will time since the last activity (negative information should drop off your report in seven years after the last activity).
If in fact your account still reflects Open on your credit card, you may want to consider leaving it open to help rebuild your credit. To do so, charge something you buy every single month, and dont have a lot of discretion in the amount spent (gasoline, or a utility bill, comes to mind). When your credit card bill arrives, pay it off promptly. This continued, responsible use of credit will help boost your credit score over time.
There is, of course, another side to this argument. Some would argue to close it and leave it closed. Dont play with snakes. I used to feel this way myself, but since turning around my own finances over the course of a couple years, Im now empowered by the fact that I can buy something on my credit card for purchase protections (particularly when shopping online), and simply pay it off in full later in the month. Im in control now; not the credit card.
It sounds like youve made a lot of progress in your own financial turnaround, and I applaud you. Whatever you decide to do, dont repeat those same mistakes from the past that led to problems paying your bill. The road back to responsible credit use can be a slippery slope, so if you feel yourself start to slip, put that credit card away and go back to spending cash.
Fraudulent charges on my credit card[22] I had to place a fraud alert on my credit card the other day because it appears that my account number was somehow compromised. Someone in New York (thousands of miles from my home) charged about $90 worth of something at a gas station. I have no idea how, since......
Citibank (NYSE: C) Cancels Exxon-Mobil (NYSE: XOM), Shell, and Conoco-Philips (NYSE: COP) Co-Branded Credit Cards without Warning[23] Citibank (NYSE: C) recently cancelled hundreds of co-branded MasterCard accounts, primarily cards associated with gas-stations, without notifying their customers. The Associated Press recently highlighted the story of Shannon Burdette, a Shell Mastercard User that found her credit card was rejected when she tried to refuel her vehicle. After calling the......
Our Finance is a collection of resources that are gathered together to provide a wealth of information for the user. We strive to provide quality financial that encourages the user to expand their knowledge of wealth, credit, and debt management. We love to hear feedback or if you think there is a resource we should add, please drop us a line: info@ourfinancedaily.com[41]
Hide
